TIME FOR LANDLORDS TO GRASP THE EPC NETTLE

Last week’s announcement of a consultation which is likely to result in all private rented homes having to achieve an EPC rating of ‘C’ or higher by 2030 probably shouldn’t have been a surprise – and with more than half of the UK’s private rented sector currently not meeting this standard, landlords simply cannot ignore it, writes Phil Cooper.

Since 2020, all rented properties have had to have an EPC rating of ‘E’ or above, so for the 52% which are currently rated ‘E’; or ‘D’, investment will be required to bring that rating up to ‘C’.  The government claims that the average cost to landlords of complying with the proposals will be between £6,100 and £6,800, with a suggested maximum cap of £15,000 per property, with a £10,000 ‘affordability exemption’ applying to homes in a lower council tax band or with lower rents.

For all sorts of reasons, landlords should consider tackling the issue sooner rather than later, rather than waiting another five years to bring forward any improvements to the energy efficiency of their properties.

For a start, there are currently two important government support schemes to help, and with public funding under pressure, there is no guarantee that these will still exist by 2030. 

The Boiler Upgrade Scheme offers grants of up to £7,500 towards the cost of replacing fossil fuel heating systems with a heat pump or biomass boiler.  Meanwhile, the Warm Homes: Local Grant, which comes into operation this year, will offer financial help towards energy performance upgrades including things such as insulation, solar panels and air source heat pumps.

Another issue is that it is not just regulation which is driving change: the rising cost of energy means that prospective tenants are already taking energy efficiency into account when assessing whether to rent a home, and how much they are prepared to pay for it.

EPC ratings are already a legal part of advertisements for rented properties, and tenants are starting to take a lot more notice of them.  The cost-of-living crisis means that the market has overtaken the legislation.

The third factor is that there will be plenty of landlords who leave it until the last minute to comply with the new rules, which means that they will find themselves in a queue along with everybody else who has left it to the last minute for contractors who will feel able to charge whatever they feel like.

This is a regulation which may have been delayed, but has always been certain to come eventually.  Landlords would do well to grasp the nettle now rather than wait until forced to take action.  They may well find doing so results in a lower cost to comply, as well as making their properties more attractive to the kind of good tenants that every landlords dreams of.